Reality Check on Novel Food

Raging inflation, rising interest rates and global insecurity deeply impact consumer behaviour, food industry and agribusiness. Due to the changing environment, food innovations will return to reality, predicts Cyrille Filott, global strategist for Consumer Foods, Packaging & Logistics at Dutch Rabobank, in an interview with GDI.
2 May, 2023 by
Reality Check on Novel Food
GDI Gottlieb Duttweiler Institute
 

GDI: Mr. Filott, when we hear the word “geopolitics”, we usually think of national interests and global shifts, of arms and army and war –we don’t think of food. But that’s what you’ll be talking about at GDI’s International Food Innovation Conference. What is the connection between food and geopolitics?

Cyrille Filott: There are many of those connections. There are very direct ones – think about the impact the conflict in Ukraine had on the prices and availability of many commodities including sunflower oil and wheat. The indirect connections are also important to notice. If geopolitical unrest leads to higher energy prices for example, this has an effect on the prices of fertilizers, or on the costs of processing food. So the effects are felt through the entire value chain. Geopolitical challenges were not that high on the agenda of food companies, including start-ups in the space. That has changed now, and with the current re-globalization trend (a shifting in alliances), it is something to watch.

Maybe food inflation may cause unrest, rebellion or civil war. But we in Europe are far away from that, aren’t we?​

I believe so, yes. But define unrest; many of the strikes in Germany, France and other countries right now (April 2023) are related to the cost of living crisis. Energy and food prices went up due to the conflict in Ukraine and workers are now looking for wage increases as well.

What we see today is a change of consumer behavior as reaction on rising food prices. Does this lead to a “new normal” of consumption, or is it more like a transitory change?

We are noticing quite a bit of change in consumer behaviour, most, but not all related to higher prices. Some of the perceived long term trends we noticed pre-Covid and pre-conflict now seem to be grinding to a halt.

For example?

The rise of food delivery or the rise in the adoption of plant-based foods, The higher food prices are leading the consumer to make changes as well, downtrading is a big theme in some European markets. Higher priced products (e.g. brands, organic food) seem to be out of favour a bit.

What will we eat in 2030? Novel food, insect protein, vegan meat? Or still Swiss bread, Swiss cheese, Swiss chocolate?

2030 is a long way out. New trends and new products will appear, and these are difficult to predict. I believe the current market is providing a bit of a reality check on novel foods. Apart from consumer preferences changing, also the high interest rates are not helping the funding of innovation. I do have to add though that the fundamental reasons for food and agribusiness to adjust because of issues such as the environmental impact have not changed. But the external environment has. So bread, cheese and chocolate will definitely be on the menu in 2030. My feel is though that the products on the plate may not be different, but that they will be produced in a (much) more sustainable way.

Food is of vital importance for every country, and the food industry is of vital importance to secure the food supply. Do you see a tendency, or the threat, of nationalization of food industries?​

This is an interesting question. Food security has suddenly become much more important in the last few years. The UK for example is not self-sufficient. Because of Brexit (Geopolitics again!) border checks have become more difficult, leading to challenges to import food. So there is a bit of emphasis for the UK to grow its own food. Overall Europe is not in bad position, and I am sure that trade will continue. Nationalization of the food industry might only happen if we run into serious geopolitical conflicts. Let’s hope that does not happen.​


Cyrille Fillot will speak at GDI's International Food Innovation Conference on 21 June about "Survive and Thrive: Navigating Geopolitics and the Economy. How current developments impact the food industry and consumer behavior, and how companies can respond." Sign up now!

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